Consolidated Grain & Barge, Inc. v. Anny et al
Filing
247
ORDER denying 225 Motion to Remand; denying 226 Motion to Remand. Signed by Judge Jay C. Zainey. (Reference: 13-5827)(jrc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CONSOLIDATED GRAIN & BARGE, INC.
CIVIL ACTION
VERSUS
No. 11-2204
c/w 11-2615 & 13-5827
Ref.: 13-5827
RANDY ANNY, ET AL.
SECTION: "A" (1)
ORDER AND REASONS
The following motions are before the Court: Motion to Remand
(Rec. Doc. 225) filed by Barbara Falgoust; Motion to Remand (Rec.
Doc. 226) filed by Randy Anny, individually and as Administrator of
the
Succession
of
Victoria
Ester
Martin.
American
River
Transportation Company ("ARTCO") opposes the motions. The motions,
set for hearing on December 4, 2013, are before the Court on the
briefs without oral argument.1
For the reasons that follow, the
motions are DENIED.
I.
BACKGROUND
On May 24, 2011, ARTCO purchased 382 acres of contiguous land
in St. James Parish, Louisiana. On or about August 11, 2011, ARTCO
discovered that Anny had constructed a fence, built a road, and
conducted other activity on land ARTCO claimed to have acquired in
their purchase less than three months prior.
ARTCO asserted to
Anny their ownership over the land and demanded that he cease and
1
The Court notes the parties' request for oral argument, but
determines that oral argument is not necessary in this matter.
desist all activity on the land.
On August 19, 2011, Anny filed a lawsuit in state court
against the "The Heirs of Albert Dubourg."2
Anny claims to have
inherited certain land from the estate of Victoria Ester Martin
that adjoins a separate tract of land located downriver (ARTCO's
property).
Anny cites a notation on a survey plat created by W. J.
Cointment in 1991 which indicates that the downriver property was
owned by Dubourg.3
Anny's suit seeks a declaratory judgment that
Martin's estate acquired ownership of some of the land on Dubourg's
property through acquisitive prescription.
Anny's petition states
that he seeks the declaratory judgment because "the adjacent land
owner has begun questioning where the property boundaries lie."
On October 17, 2011, ARTCO filed a lawsuit against Anny in
this Court, alleging that Anny had unlawfully trespassed upon and
disturbed ARTCO’s real property. This dispute was designated Civil
Action 11-2615.
2
Anny's state court petition states that "the appropriate
heirs of Albert Dubourg, who is believed to have died on or about
December 3, 1948, are unknown." Civil Action 13-5827, Rec. Doc.
1-1 at pg. 4.
3
Cointment has submitted an affidavit in this case stating
that the notation on his plat indicating Dubourg's present or
former ownership of that property was incorrect. Further,
Cointment states that in creating the plat, his notation was not
verified, not based on any title examination, and not meant to
form an opinion as to the ownership of the property. He states
that he later learned from a surveying company that the landmark
which he thought depicted the property line actually depicted an
offset or traverse line. See Rec. Doc. 237-1 at pgs. 124-30.
2
In Anny's state court lawsuit, the court appointed attorney
Dale Petit as curator to search for and to represent the heirs of
Dubourg.
Petit was unable to locate any heirs of Dubourg, but
filed a general denial answer on their behalf after Anny attempted
to take a default judgment against them.
Upon realizing that a
dispute over the same land was taking place in Civil Action 11-2615
between Anny and ARTCO, Petit filed a motion4 in state court to
continue the proceedings, pending the resolution of Civil Action
11-2615.5
On June 21, 2013, Anny's wife Falgoust intervened in Anny's
state court lawsuit, asserting her ownership of the land at issue.
Falgoust claims to have purchased the disputed land from the Martin
estate.
Falgoust's petition of intervention named as defendants
Anny and the heirs of Dubourg, seeking to preclude them from
asserting ownership over the land.6
On August 6, 2013, Falgoust filed an amended petition of
intervention
in
the
state
court
lawsuit,
adding
ARTCO
as
a
defendant. Falgoust once again claims ownership of the property at
4
Rec. Doc. 237-1 at pgs. 26-31.
5
Petit notes that in the federal court litigation between
ARTCO and Anny, Anny makes the same arguments for acquisitive
prescription over the same tract of land as in the state court
litigation against the heirs of Dubourg.
6
On July 29, 2013, Falgoust filed a Motion for Preliminary
Default against Anny and the heirs of Dubourg. The state court
entered preliminary default against these parties on August 14,
2013. Rec. Doc. 237-5 at pgs. 20-21.
3
issue and notes that "all or part of the same property" is the
subject of the dispute between ARTCO and Anny in this Court's Civil
Action 11-2615.
As a result, Falgoust contends that ARTCO should
be made a party to the state court lawsuit.
After being made a party, ARTCO removed the case to this Court
on the basis of diversity jurisdiction.
The action was designated
Civil Action 13-5827 and consolidated with Civil Action 11-2615.
In the instant motions, Falgoust and Anny seek to have Civil Action
13-5827 remanded to state court.
II.
CONTROLLING LAW
Diversity jurisdiction has two requirements, both of which
must be fulfilled for a district court to have the power to hear a
case.
There
must
first
be
complete
diversity
between
all
plaintiffs and all defendants; secondly, the amount in controversy
must be greater than $75,000.7
Any civil action brought in a state court may be removed to a
district court if the district court would have had original
jurisdiction.8
The removing party must establish the existence of
federal jurisdiction.9
Where improper or fraudulent joinder is
being alleged to establish jurisdiction, as ARTCO is claiming, the
7
28 U.S.C. § 1332(a)(1).
8
28 U.S.C. § 1441.
9
Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th
Cir. 1992) (citing B., Inc. v. Miller Brewing Co., 63 F.2d 545
(5th Cir. 1981)).
4
removing party has the burden of proving the claimed fraud.10
Fifth
Circuit
has
recognized
two
ways
to
establish
The
improper
joinder: actual fraud in the pleading of jurisdictional facts, or
inability of the plaintiff to establish a cause of action against
the non-diverse party in state court.11
The manner by which a removing party may prove improper
joinder
under
the
second
part
of
the
Smallwood
test
is
by
demonstrating “that there is no possibility of recovery by the
plaintiff against an in-state defendant,” which means “there is no
reasonable basis for the district court to predict that the
plaintiff might be able to recover against an in-state defendant.”12
A
court
makes
analysis.13
this
determination
by
conducting
a
12(b)(6)
However, in conducting this analysis, the court is not
limited to a review of the pleadings; rather, the court may pierce
the pleadings and consider summary-judgment-type evidence in the
record.14
“Ordinarily, if a plaintiff can survive a Rule 12(b)(6)
challenge, there is no improper joinder.”15
10
Dodson, 951 F.2d at 42.
11
Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 573 (5th
Cir. 2004).
12
Id.
13
Id.
14
Travis v. Irby, 326 F.3d 644, 648-49 (5th Cir. 2003).
15
Smallwood, 385 F.3d at 573.
5
The court must resolve all disputed questions of fact and all
ambiguities in the controlling state law in favor of the nonremoving
party,
then
determine
whether
that
party
has
any
possibility of recovery against the party whose joinder is being
questioned.16
The court does not decide whether the plaintiff will
actually or even probably prevail on the merits, it only asks if
there is a possibility he may do so.17
III. ANALYSIS
a.) Complete Diversity
The first requirement for diversity jurisdiction is that
complete diversity must exist between all plaintiffs and all
defendants.
As an initial matter, the Court will analyze improper
joinder by looking at whether the various claims can survive
challenges under Rule 12(b)(6).
The Court will first examine Anny's claim against the heirs of
Dubourg. Anny's petition states that he seeks declaratory judgment
because "the adjacent land owner has begun questioning where the
property boundaries lie."
However, despite Anny's knowledge of
ARTCO's purchase of the adjoining land and claims regarding its
boundaries, he chose to file the suit against the unknown heirs of
Dubourg.
16
As Petit, the court-appointed curator for the unknown
Dodson v. Spiliada Mar. Corp., 951 F.2d 40, 42 (5th Cir.
1992).
17
Id. (citing Green v. Amerada Hess Corp., 707 F.2d 201 (5th
Cir. 1983)).
6
heirs of Dubourg, has pointed out in his filings18 in state court,
Anny sued the wrong defendant.
In Anny's state court petition, the basis on which he relies
to name the heirs of Dubourg as defendants is a plat prepared by
Cointment in 1991 denoting Dubourg as owner of the property.
However, an affidavit19 submitted by Cointment makes clear that his
plat, which indicated Dubourg's present or former ownership of the
land, was not based on any title examination, was not meant to form
an opinion as to the ownership of the property, and was wholly
incorrect.
Without a reliable basis to show that Dubourg holds
record title to the land at issue or makes any claim of ownership
over that land, Anny has no claim for acquisitive prescription
against him.
Therefore, Anny's claim against the heirs of Dubourg
will not enter into this Court's determination of jurisdiction.
The Court next looks to Falgoust's claim against the heirs of
Dubourg.
Petit, as court-appointed curator for the heirs of
Dubourg, submitted a general denial to Anny's complaint in order to
avoid a default judgment.
The heirs of Dubourg are a non-existent
entity that does not claim any ownership in the land at issue.
Thus, Falgoust does not have a claim against them.
Just like
Anny's claim against the heirs of Dubourg, Falgoust's claim against
them will not enter into the Court's jurisdictional determination.
18
Rec. Doc. 237-1 at pgs. 26-31.
19
Id. at pgs. 124-30.
7
The Court next looks to Falgoust's claim against Anny.
previous
order,
this
Court
has
noted
Falgoust's
In a
refusal
to
intervene in Civil Action 11-2615, despite her knowledge of the
litigation and assertion of ownership over the land at issue.
Instead, Falgoust waited almost two years after the initiation of
all
proceedings
and
intervened
in
her
husband's
state
court
lawsuit, proceeding to move for default against him and then bring
ARTCO into the lawsuit as third party defendant. Falgoust and Anny
argue that since Falgoust has brought claims against Anny, a nondiverse defendant, as well as ARTCO, complete diversity does not
exist.
The Court struggles with the idea of allowing diversity to be
destroyed by a claim between parties that are not only husband and
wife, but are also represented by the same law firm.
The Supreme
Court has stated that "[d]iversity jurisdiction cannot be conferred
upon the federal courts by the parties' own determination of who
are plaintiffs and who defendants."20
Rather, in ascertaining the
proper alignment of parties for jurisdictional purposes, courts
have a "duty" to "look beyond the pleadings, and arrange the
parties according to their sides in the dispute."21
In the Fifth
Circuit, "[t]he generally accepted test of proper alignment is
20
City of Indianapolis v. Chase Nat. Bank of City of New
York, 314 U.S. 63, 69 (1941).
21
Griffin v. Lee, 621 F.3d 380, 388 (5th Cir. 2010) (quoting
City of Indianapolis, 314 U.S. at 69).
8
whether the parties with the same 'ultimate interests' in the
outcome of the action are on the same side."22
In carrying out its aforementioned duty, the Court finds that
Anny and Falgoust share the same interests in this dispute.
Despite Falgoust and Anny's notion that they are adverse to each
other in this lawsuit, what lies in common beneath their claims in
both Civil Actions 11-2615 and 13-5827 is the staunch resistance to
ARTCO's claim of ownership over the disputed land.
The efforts of
Anny and Falgoust, and that of their shared counsel, contemplate
the same end goal of fending off ARTCO's claim of ownership over
that land, whether success in doing so comes through Falgoust's
claim
of
record
ownership
or
Anny's
claim
of
acquisitive
prescription, as he has asserted against ARTCO in Civil Action 112615.
As
such,
both
Falgoust
and
Anny
will
be
considered
plaintiffs and Falgoust's claim against Anny will not be given the
power to defeat diversity.
The remaining claim for the Court to consider in ruling on the
instant motions is Falgoust's claim against ARTCO.
ARTCO does not
dispute Falgoust's ability to state a claim against it, nor does
the Court.
For purposes of determining diversity to rule on the instant
motions to remand, Civil Action 13-5827 consists of a claim by
22
Id. (quoting Lowe v. Ingalls Shipbuilding, A Div. of
Litton Sys., Inc., 723 F.2d 1173, 1178 (5th Cir. 1984)).
9
Falgoust as plaintiff against ARTCO as defendant.
As Falgoust is
a citizen of Louisiana and ARTCO is a citizen of Illinois, complete
diversity exists among the parties.
Next, the Court will determine whether ARTCO's removal of this
action was timely. The timeliness of removal based on diversity of
citizenship is governed by 28 U.S.C. § 1446(c)(1), which provides:
(1) A case may not be removed under subsection (b)(3) on
the basis of jurisdiction conferred by section 1332 more
than 1 year after commencement of the action, unless the
district court finds that the plaintiff has acted in bad
faith in order to prevent a defendant from removing the
action.23
Under 28 U.S.C. § 1446(c)(1), cases that are not originally
removable but become removable at a later time may not be removed
on the basis of diversity more than one year after commencement of
the action.
However, the statute provides an equitable estoppel
exception to the one-year time limit when a plaintiff has acted in
bad faith.
The Fifth Circuit applies the equitable estoppel
exception when a party has "attempted to manipulate the statutory
rules
for
determining
federal
removal
jurisdiction,
thereby
preventing the defendant from exercising its rights."24
ARTCO does not dispute that removal of the state court lawsuit
took place more than one year after its commencement.
However,
ARTCO argues that Falgoust acted in bad faith to prevent removal
23
28 U.S.C. § 1446(c)(1).
24
Tedford v. Warner-Lambert Co., 327 F.3d 423, 428-29 (5th
Cir. 2003).
10
and therefore should be equitably estopped from invoking the
one-year time limit under 28 U.S.C. § 1446(c)(1).
On November 14, 2011, Falgoust submitted a declaration in
Civil Action 11-2615 stating that she purchased the property in
dispute between ARTCO and Anny in 1995 "from the estate of Victoria
Ester” and is “the current owner of the subject property.”25
In a
previous order, this Court stated that Falgoust's declaration made
clear her awareness that ownership of the land was in dispute
between
ARTCO
and
Anny
in
Civil
Action
11-2615.26
Despite
Falgoust's apparent decision not to intervene in Civil Action 112615 and challenge ARTCO’s claim of ownership, she had a claim at
that time if she so chose to bring it.
Instead, Falgoust waited
almost two years and intervened in Anny's state court lawsuit,
asserting a non-diverse claim against Anny and then adding ARTCO as
a defendant.
The
Court
"transparent
finds
attempt
that
to
Falgoust's
circumvent
actions
federal
represent
a
jurisdiction."27
Accordingly, the Court refuses to apply the one-year time limit for
removal due to Falgoust's bad faith under 28 U.S.C. § 1446(c)(1).
25
Rec. Doc. 28-2 at pg. 4.
26
Rec. Doc. 145 at pg. 6.
27
Foster v. Landon, CIV.A. 04-2645, 2004 WL 2496216 at *5
(E.D. La. Nov. 4, 2004).
11
b.) Amount in Controversy
The second requirement for diversity jurisdiction is that the
amount in controversy must exceed $75,000.
The defendant in a
removed action must prove by a preponderance of the evidence that
the amount in controversy exceeds $75,000, exclusive of costs and
interest.28
As the Fifth Circuit has explained:
The defendant may make [its] showing in either of two
ways: (1) by demonstrating that it is facially apparent
from the petition that the claims are likely above
$75,000.00, or (2) by setting forth the facts in
controversy-preferably in the removal petition, but
sometimes by affidavit-that support a finding of the
requisite amount.29
In situations where the amount in controversy is not facially
apparent
from
the
complaint,
"summary-judgment-type"
the
evidence
to
court
may
ascertain
then
the
rely
on
amount
in
controversy.30
"In actions seeking declaratory or injunctive relief, it is
well established that the amount in controversy is measured by the
value of the object of the litigation."31
Here, Falgoust is
28
Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th
Cir. 1999).
29
Id. (citing Allen v. R & H Oil & Gas Co., 63 F.3d 1326,
1335 (5th Cir. 1995)).
30
White v. FCI USA, Inc., 319 F.3d 672, 675 (5th Cir. 2003)
(citing St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d
1250, 1253 (5th Cir. 1998); De Aguilar v. Boeing Co., 11 F.3d 55,
57-58 (5th Cir. 1993)).
31
Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th
Cir. 2013) (quoting Hunt v. Wash. State Apple Adver. Comm'n, 432
12
asserting ownership over the disputed tract of land.
As such, the
amount in controversy will be determined by the value of that land.
While ARTCO's Notice of Removal states that the amount in
controversy exceeds $75,000, Anny and Falgoust deny that this
jurisdictional amount has been established.
Anny and Falgoust
argue that since the land in controversy comprises less than four
acres, using the per-acre price that ARTCO paid for their land
values four acres at only $64,000.
However, this method of
calculating the land's value on a per-acre basis does not take into
account the difference in value between land that can be classified
as batture property and that which cannot.
In support of its contention that the jurisdictional amount is
satisfied, ARTCO has submitted the declaration32 of Patrick Egan,
a Louisiana State Certified General Real Estate Appraiser with over
forty years of experience.33 Egan attests that the batture property
at issue in this lawsuit is worth approximately $600 per linear
foot.
As the land in dispute is in excess of 200 linear feet of
batture property, Egan states that "the value of the disputed
property in question should exceed $120,000."
U.S. 333, 347 (1977)).
32
Rec. Doc. 237-6 at pgs. 38-41.
33
Egan's declaration was submitted pursuant to 28 U.S.C.A. §
1746, which gives the effect of an affidavit to one's writing
subscribed by him, as true under penalty of perjury, and dated,
in appropriate form.
13
The
Court,
evidence
before
having
it,
considered
finds
the
the
summary-judgment-type
declaration
reasonable basis for valuing the property.
of
Egan
to
be
a
As such, the amount in
controversy for Falgoust's claim against ARTCO exceeds the $75,000
threshold
and
this
requirement
for
diversity
jurisdiction
is
therefore satisfied.
IV.
CONCLUSION
In sum, this Court has subject matter jurisdiction over Civil
Action 13-5827, as diversity of citizenship exists among the
parties.
Accordingly, and for the foregoing reasons;
IT IS ORDERED that the Motion to Remand (Rec. Doc. 225) filed
by Barbara Falgoust is DENIED;
IT IS FURTHER ORDERED that the Motion to Remand (Rec. Doc.
226) filed by Randy Anny, individually and as Administrator of the
Succession of Victoria Ester Martin, is DENIED.
This 7th day of April, 2014.
______________________________
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE
14
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